Legislation has passed to provide temporary cash flow support to small and medium businesses and not-for-profit organisations that:
Have been affected by the economic downturn associated with COVID-19 (novel corona virus).
Eligible businesses and not-for-profit (NFP) organisations will receive between $20,000 to $100,000 in cash flow boost amounts by lodging their activity statements up to the month or quarter of September 2020.
The cash flow boosts will be delivered as credits in the activity statement system from 28 April 2020. The amounts will generally be equivalent to the amount withheld from wages paid to employees in the March to June 2020 periods. In practice, this means you keep the amounts you have withheld from payments for these periods, however, there are some exceptions.
An additional cash flow boost will be applied when activity statements are lodged for June to September 2020. These credits are equal to the total boosts credited for March to June 2020. They will be paid out in either two or four installments depending on your reporting cycle.
What you need to know
For most businesses, the cash flow boost will automatically be credited to your account when you lodge your activity statement. The first credit will occur on or after 28 April 2020. Even if you lodge before 28 April 2020, you will not be credited with the cash flow boost before this date.
The cash flow boosts will be applied to reduce liabilities arising from the same activity statement. If there is credit remaining after this occurs you will generally receive a refund of that amount.
To support eligible entities during the period associated with COVID-19, from 28 April 2020 any excess credit from the activity statement that received the cash flow boost amount will be refunded to you, rather than offset against any other tax debts you have. However, any excess may still be applied against any outstanding debts with other Australian Government agencies.
For most businesses and NFP organisations you will be eligible to receive the cash flow boost if:
You are a small or medium business entity or NFP of equivalent size (that is, an entity with aggregated annual turnover less than $50 million).
You held an ABN on 12 March 2020.
You made payments to employees subject to withholding (even if the amount you withheld is zero), such as:
+ Salary and wages.
+ Director fees.
+ Eligible retirement or termination payments.
+ Compensation payments.
+ Voluntary withholding from payments to contractors.
You have lodged, on or before 12 March 2020, at least one of
+ A 2018–19 income tax return showing that you had an amount included in your assessable income in relation to you carrying on a business.
+ An activity statement or GST return for any tax period that started after 1 July 2018 and ended before 12 March 2020 showing that you made a taxable, GST-free or input-taxed sale.
We have discretion to give you further time, after 12 March 2020, to:
Hold an ABN.
Provide us notice that business income or supplies were made.
However, the discretion is intended to be utilized only in very exceptional circumstances. This can include where you cannot satisfy the condition:
because although you were running an active business prior to 12 March 2020, you were not required to hold an ABN as a matter of law. For example, an entity which operates in the external Territories of Australia is not required to have an ABN.
only because you have deferred your lodgment under an extension of lodgment date granted by the Commissioner. For example, you had an automatic ATO lodgment deferral in place, as you were affected by the Australian bush-fires in late 2019, and you will lodge your first BAS after 12 March 2020.
We are unlikely to exercise the discretion to extend the 12 March 2020 date if doing so would be inconsistent with the integrity provisions. For example, this may include where steps are taken to set up new entities, or revive dormant entities, solely for the purposes of accessing the cash flow boost.
You are not eligible for the cash flow boosts if you change the way you operate for the purpose of becoming entitled to cash flow boosts when you would otherwise not be entitled.
For the latest advice, information, copy and resources, go to https://www.ato.gov.au/
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